A Chinese man has pleaded guilty in a “years-long” conspiracy to hack into U.S. networks to steal sensitive information, including data on the C-17 cargo plane and fighter jet aircraft, the Justice Department announced Wednesday. Read more of this post

The Chinese regime nearly got its hands on new designs for America’s latest fighter jet. New designs that could cut costs in producing the F-35 advanced fighter jet were found in the luggage of a Chinese national who was traveling from New York to China. Read more of this post

WASHINGTON (Reuters) – A Chinese company’s attempt to take over government-backed battery maker A123 raises serious national security concerns, a bipartisan group of lawmakers said this week, adding to growing congressional opposition to the deal.

The government must ensure that any sale of A123’s technology, which has also been used by the military and to support the U.S. electrical grid, does not threaten domestic security, the senators said in letter to Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu and other top cabinet officials.

New York: India, a big buyer of American arms, is understandably concerned by a key US senate committee report that finds vast numbers of counterfeit Chinese electronic parts are being used in US military equipment. Where does it leave India if suspect parts have crept into US-built aircrafts and missiles it has bought or put on its shopping list? The failure of a single electronic component could put an Indian airman or soldier at risk.

Over a 14-month investigation, the Senate committee’s investigative staff amassed a database with 1,800 cases of counterfeiting involving about 1 million parts. It found that 70 percent of the suspect parts were traced to fly-by-night, unscrupulous Chinese companies who supplied electronics and other computer chips to large US defence manufacturers.

Picture courtesy Boeing

India will acquire ten C-17 Globemaster-III aircrafts from Boeing for $4.1 billion, which will be delivered in 2013.

Defence Minister AK Antony told the Rajya Sabha in a written reply on Wednesday that India was verifying if “faulty spare parts made in China” were used in defence equipment being sold by the US to India.

“There have been media reports in this regard, which are being verified,” Antony said this week.

According to Bloomberg, the US Air Force had in January this year suspended a company called Hong Dark Electronic Trade Co., in Shenzhen (in southern China), from supplying parts to US contractors after it supplied about 84,000 fake components to a middleman, who then sold the suspect electronic parts to Boeing, Lockheed Martin, Raytheon, L-3 Communications, among others.

Bloomberg quoted Air Force Deputy General Counsel Steven Shaw’s memo saying; œMany of the 84,000 electronic parts from Hong Dark have been installed on aircraft such the C-17 transport and helicopters such as the AH-64 Apache and CH-46.”

Given Shaw’s memo, India should double-check what it is paying for when it receives new aircraft. The first of the 10 Boeing C-17 Globemaster III aircraft ordered last year will be delivered to the Indian Air Force in June next year. India is forking over $4.1 billion (Rs 22,960 crore) to buy the US Air Force’s workhorse used extensively in Iraq and Afghanistan, making it the largest defence contract to have been signed by the two governments.

Antony listed some of the other US military equipment India had bought in the last five years. Last year, India purchased an amphibious transport vessel, the USS Trenton (re-christened INS Jalashwa), for nearly $50 million with six-UH-3H helicopters to operate alongside, costing another $49 million.

One reason India is beefing up its arsenal is China, which has been expanding its military and modernising its equipment at a tear. This has triggered a simultaneous build-up of advanced weaponry in the Asia-Pacific region on a scale and at a speed not seen since the Cold War arms race between America and the Soviet Union.

India has purchased some $12.7 billion in arms, 80 percent of them from Russia, during 2007-2011, according to the Stockholm International Peace Research Institute (SIPRI). India and the US want to eventually move beyond a seller-buyer relationship to substantial co-production and eventually, high-technology joint research and development of weapons.

HONOLULU – A former B-2 stealth bomber engineer was sentenced to 32 years in prison Monday for selling military secrets to China in the latest of several high-profile cases of Chinese espionage in the U.S.

Chief U.S. District Judge Susan Oki Mollway said Noshir Gowadia, 66, would likely be in his late 80s by the time he is released if he gets credit for good behavior in prison.

“He broke his oath of loyalty to this country,” Mollway said. “He was found guilty of marketing valuable technology to foreign countries for personal gain.”

Gowadia was convicted in August on 14 counts, including communicating national defense information to aid a foreign nation and violating the arms export control act.

Prosecutors said Gowadia helped China design a stealth cruise missile to get money to pay the $15,000-a-month mortgage on his luxurious multimillion dollar home overlooking the ocean on Maui. They say he pocketed at least $110,000 by selling military secrets.

The defense argued Gowadia only provided unclassified information to China and was innocent.

His son, Ashton Gowadia, told reporters the jury wasn’t able to see documents that would absolve his father of the crimes because they were deemed classified. He said his father’s defense team would present these during an appeal.

“My father would never, ever do anything to intentionally to hurt this country,” Ashton Gowadia said. “We hope the convictions will be overturned and he’ll be able to go home.”

Assistant U.S. Attorney Ken Sorenson, the lead prosecutor, had asked Mollway to sentence Gowadia to life in prison. But he said 32 years was a stiff and appropriate sentence given Gowadia’s age.

“We’re confident the message is sent that when you compromise U.S. national security, when you disclose national defense secrets, when you profit by U.S. national defense information, that you will be punished, you will be pursued, you will be convicted,” Sorenson told reporters.

A federal jury in Honolulu found Gowadia helped China design a cruise missile exhaust nozzle that would give off less heat, allowing the missile to evade infrared radar detection and U.S. heat-seeking missiles.

The jury, after hearing 39 days of evidence over nearly four months, also found Gowadia guilty of attempting to sell classified stealth technology to the Swiss government and businesses in Israel and Germany.

The case follows other high-profile convictions of people accused of providing secrets to China.

Last March, Chinese-born engineer Dongfan “Greg” Chung was sentenced to more than 15 years in prison after he was convicted of six counts of economic espionage and other federal charges.

A defense contractor engineer, Chi Mak, was sentenced in 2008 to 24 years in prison after being convicted of conspiracy to export U.S. defense technology to China.

Gowadia’s sentencing came just weeks after China conducted a flight test of its new J-20 stealth fighter during a visit to Beijing by U.S. Defense Secretary Robert Gates.

The Jan. 11 flight was held at an airfield in Chengdu, where prosecutors said Gowadia delivered an oral presentation on classified stealth technology in 2003.

Chengdu is a center for Chinese fighter aircraft and cruise missile research and development.

The judge sentenced Gowadia to 32 years for each of two counts of communicating national defense information to aid a foreign nation.

She also gave him 20 years for each of four counts of violating the arms export control act, and 10 years for each of five lesser counts including money laundering. He received five years for one count of conspiracy and three years for two counts of filing a false tax return.

But Mollway ordered the sentences to run together.

Gowadia has already spent more than five years at Honolulu’s federal detention center after he was ordered held without bail following his 2005 arrest.

The engineer helped design the propulsion system for the B-2 bomber when he worked at Northrop Corp., now known as Northrop Grumman Corp., between 1968 and 1986.

Born in India, Gowadia moved to the U.S. for postgraduate work in the 1960s and became a U.S. citizen about a decade later. He moved to Maui in 1999.

Boeing Co. swung to a third-quarter loss on $3.5 billion of previously disclosed charges caused by the delay-plagued programs for the 747-8 Freighter and the 787 Dreamliner.

The commercial-aircraft manufacturer and defense contractor lowered its forecast for 2009 earnings to between $1.35 and 1.55 a share, down more than $4 from its July forecast. The Chicago-based company stuck with its outlook of $68 billion to $69 billion in revenue for the year.

Monday, rival Lockheed Martin Corp. posted a slight increase in profit but gave a grim view of next year because of belt-tightening at the U.S. Defense Department.

Boeing, which is the nation’s No. 2 government defense contractor, behind Lockheed, has leaned on strength in that business to offset weakness from commercial aircraft as airlines have put purchases on hold as they reduce capacity. Boeing also has tarnished its reputation with delays to both its Dreamliner and 747-8 programs, which resulted in the charges in the most recent period. Boeing last week reiterated that the Dreamliner is set to take its first flight by year-end.

Boeing didn’t say Wednesday that the Dreamliner has moved into a so-called forward-loss position, essentially meaning it is unprofitable, unlike the 747 program.

Chief Executive Jim McNerney said the company looks forward to getting the 747-8 in the air soon.

“The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business,” Mr. McNerney said in a prepared statement.

Boeing posted a loss of $1.56 billion, or $2.23 a share, compared with a year-earlier profit of $695 million, or 96 cents a share. The combined $3.5 billion in charges on the 747 and Dreamliner, the most Boeing has recorded in a single quarter, amounted to $3.59 a share.